South Port Full Year End Results

Results announcement
(for Equity Security issuer/Equity and Debt Security issuer)
Updated as at 8 May 2019


Results for announcement to the market
Name of issuer South Port New Zealand Limited
Reporting Period 12 months to 30 June 2019
Previous Reporting Period 12 months to 30 June 2018
Currency NZD

Amount (000s) Percentage change
Revenue from continuing
operations
$43,950 7.97%
Total Revenue $44,026 7.34%
Net profit/(loss) from
continuing operations
$9,787 1.34%
Total net profit/(loss) $9,787 1.34%
Interim/Final Dividend
Amount per Quoted Equity
Security
$0.18500000
Imputed amount per Quoted
Equity Security
$0.07194444
Record Date 01/11/2019
Dividend Payment Date 12/11/2019
Current period Prior comparable period
Net tangible assets per
Quoted Equity Security
$1.64 $1.53
A brief explanation of any of
the figures above necessary
to enable the figures to be
understood

Authority for this announcement
Name of person

authorised
to make this announcement
Kirsten Hoyle
Contact person for this
announcement
Kirsten Hoyle
Contact phone number 027 253 9112
Contact email address khoyle@southport.co.nz
Date of release through MAP

29/08/2019

Audited financial statements accompany this announcement.

---

Distribution Notice

Updated as at 8 May 2019

Please note: all cash amounts in this form should be provided to 8 decimal places

Section 1: Issuer information
Name of issuer South Port New Zealand Limited
Financial product name/description Fully Paid Shares
NZX ticker code
ISIN (If unknown, check on NZX
website)
NZSPNE0001S8
Type of distribution
(Please mark with an X in the
relevant box/es)
Full Year X Quarterly
Half Year Special
DRP applies
Record date 01/11/2019
Ex-Date (one business day before
the Record Date)
31/10/2019
Payment date (and allotment date for
DRP)
12/11/2019
Total monies associated with the
distribution
1

$ 4,853,456.13
Source of distribution (for example,
retained earnings)
Retained Earnings
Currency NZD
Section 2: Distribution amounts per financial product
Gross distribution
2
$0.25694444
Total cash distribution
3
$0.18500000
Excluded amount (applicable to listed
PIEs)

Supplementary distribution amount $0.03264706
Section 3: Imputation credits and Resident Withholding Tax
4

Is the distribution imputed Fully imputed X
Partial imputation
No imputation
If fully or partially imputed, please
state imputation rate as % applied
28%
Imputation tax credits per financial $0.07194444

1
Continuous issuers should indicate that this is based on the number of units on issue at the date of the form
2
“Gross distribution” is the total cash distribution plus the amount of imputation credits, per financial product, before the deduction of
Resident Withholding Tax (RWT).
3
“Total cash distribution” is the cash distribution excluding imputation credits, per financial product, before the deduction of RWT.
This should include any excluded amounts, where applicable to listed PIEs.
4
The imputation credits plus the RWT amount is 33% of the gross distribution for the purposes of this form. If the distribution is fully
imputed the imputation credits will be 28% of the gross distribution with remaining 5% being RWT. This does not constitute advice
as to whether or not RWT needs to be withheld.

product
Resident Withholding Tax per
financial product
$0.01284722
Section 4: Distribution re-investment plan (if applicable)
DRP % discount (if any)

Start date and end date for
determining market price for DRP

Date strike price to be announced (if
not available at this time)

Specify source of financial products
to be issued under DRP programme
(new issue or to be bought on
market)

DRP strike price per financial product

Last date to submit a participation
notice for this distribution in
accordance with DRP participation
terms

Section 5: Authority for this announcement
Name of person

authorised to make
this announcement
Kirsten Hoyle
Contact person for this
announcement
Kirsten Hoyle
Contact phone number 027 253 9112
Contact email address khoyle@southport.co.nz
Date of release through MAP

29/08/2019

---

NOTEGROUP
Statement of Comprehensive Income
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2019
Statement of Changes in Equity
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2019
GROUP
Share CapitalRetained EarningsTotal Equity
In Thousands of New Zealand Dollars 2019 2018
Total operating revenues from port services 5 43,950 40,705
Total operating expenses 7 (25,768) (23,258)
Gross profit 18,182 17,447
Administrative expenses (3,802) (3,650)
Operating profit before financing costs 14,380 13,797
Financial income 25 22
Financial expenses (746) (601)
Net financing costs 6 (721) (579)
Other income 5 51 290
Surplus before income tax 13,710 13,508

Income tax (3,923) (3,850)
Total income tax 10 (3,923) (3,850)
Net surplus after income tax 9,787 9,658
Other comprehensive income — —
Total other comprehensive surplus/(loss) after income tax — —
Total comprehensive surplus/(loss) after income tax 9,787 9,658
Basic earnings per share 16 $0.373 $0.368
In Thousands of New Zealand Dollars
Balance 1 July 2017 9,418 27,805 37,223
Profit/(loss) after income tax — 9,658 9,658
Other comprehensive income — — —
Total comprehensive income — 9,658 9,658
Contributions by and distributions to owners
Dividends paid during the period (refer to note 14) — (6,821) (6,821)
Balance as at 30 June 2018 9,418 30,642 40,060
Balance 1 July 2018 9,418 30,642 40,060
Profit/(loss) after income tax — 9,787 9,787
Other comprehensive income — — —
Total comprehensive income — 9,787 9,787
Contributions by and distributions to owners
Dividends paid during the period (refer to note 14) — (6,821) (6,821)
Balance as at 30 June 2019 9,418 33,608 43,026
69SOUTH PORT ANNUAL REPORT 2019

Statement of Financial Position
OF SOUTH PORT NEW ZEALAND LIMITED as at 30 JUNE 2019
On behalf of the Board
Dated
29 August 2019
Chairman of DirectorsDirector
The accompanying notes form part of these financial statements
In Thousands of New Zealand Dollars 2019 2018
TOTAL EQUITY 14 43,026 40,060
NON-CURRENT ASSETS
Property, plant and equipment 11 49,571 47,471

Total non-current assets 49,571 47,471
CURRENT ASSETS
Cash and cash equivalents 12 1,426 991
Trade and other receivables 13 5,702 5,648
Total current assets 7,128 6,639
Total assets 56,699 54,110
NON-CURRENT LIABILITIES
Employee entitlements 18 19 47
Deferred tax liability 10(d) 48 301
Loans and borrowings 17 7,000 7,200
Financial liabilities 20 530 353
Total non-current liabilities 7,597 7,901
CURRENT LIABILITIES
Loans and borrowings 17 — —
Trade and other payables 19 3,152 3,388
Employee entitlements 18 1,172 1,132
Provision for taxation 10(c) 1,682 1,629
Financial liabilities 20 70 —
Total current liabilities 6,076 6,149
Total liabilities 13,673 14,050
TOTAL NET ASSETS 43,026 40,060
Net asset backing per share $1.64 $1.53
NOTEGROUP
70SOUTH PORT ANNUAL REPORT 2019

The accompanying notes form part of these financial statements
Statement of Cash Flows
OF SOUTH PORT NEW ZEALAND LIMITED FOR THE YEAR ENDED 30 JUNE 2019
In Thousands of New Zealand Dollars 2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Cash was provided by (applied to):
Receipts from customers 43,897 39,366
Payments to suppliers and employees (25,856) (22,614)
Interest received 25 22
Interest paid (488) (505)
Income taxes paid (4,123) (3,564)
Net goods and services tax paid 99 (363)

Net cash flow from operating activities 23 13,554 12,342
CASH FLOWS FROM INVESTING ACTIVITIES
Cash was provided by (applied to):
Proceeds from disposal of non-current assets 48 388
Acquisition of other non-current assets (6,146) (4,193)
Net cash used in investing activities (6,098) (3,805)
CASH FLOWS FROM FINANCING ACTIVITIES
Cash was provided by (applied to):
Dividend paid (6,821) (6,821)
Drawdown/(repayment) of borrowings (200) (2,400)
Net cash used in financing activities (7,021) (9,221)
NET INCREASE (DECREASE) IN CASH HELD 435 (684)
Add cash at beginning of year 991 1,675
Net foreign exchange differences —
TOTAL CASH AT END OF YEAR 12 1,426 991
NOTEGROUP
71SOUTH PORT ANNUAL REPORT 2019
ts

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SOUTH PORT NEW ZEALAND LIMITED

NZX Announcement and Media Release

SOUTH PORT FULL YEAR 2019 RESULTS
For Release following the 29 August 2019 Board Meeting


29 August 2019

Rising trades carry South Port to record year

A steady level of bulk cargo and increased container activity were key contributors to
another record year for South Port New Zealand Limited in the period ending
30 June 2019.

A 2% increase in cargo flows confirmed the sustained strength of the southern
New Zealand economy - total cargo volume was 3,521,000 tonnes
(2018 - 3,445,000 tonnes) another record performance.

Reported after-tax profit of $9.79 million (2018 - $9.66 million) is a 1% increase on
last year which South Port Chairman Rex Chapman said “is a pleasing result
consistent with the June guidance that strong late season cargo flows would see
South Port’s result similar to last year’s record.”

“This result is certainly much better than we expected at the time of releasing the
interim report in February, when earnings looked likely to fall within the range of
$8.6 million to $8.9 million, as increased infrastructure expenditure continued to
impact profit.”

“The strong business activity had given us confidence to continue port developments
such as the $1.7 million upgrade to the Island Harbour Cold Stores infrastructure,
including the installation of a new blast freezing facility.”

“The Board has confirmed a final dividend of 18.50 cents this year, thus maintaining
a steady full year dividend of 26 cents.”

CARGO GROWTH

Bulk cargo remained at 87% of all volumes imported or exported across South Port
wharves.

South Port Chief Executive Nigel Gear said “for the second year running log cargoes
reached 700,000 MT and combined with woodchips at 320,000 MT, forestry is now
34% of total bulk cargo volume handled at the Port.

Log prices in China recently dropped significantly due to an oversupply into this
market.

Container traffic was the standout performer this year in the Company’s trade
statistics, increasing by 25% to 48,700 TEU (2018 – 39,100 TEU).

The Mediterranean Shipping Company’s (MSC) Capricorn Container Service made
54 calls this year (2018 52 calls) averaging 900 TEU exchanges per call.

P a g e | 2


The change in port rotations and reduced transit times to market has resulted in a
combination of increased full container exports being shipped and empty containers
being recycled through the Port.

COLD STORAGE CAPEX

South Port’s warehousing operations performed above expectations this past
season. The closure of the Foreshore Road cold storage complex and the
consolidation of this activity on the Island Harbour enabled the business to focus all
of its resources at the one location.

To enable this transfer, South Port undertook a $1.71 million capital expenditure
project to modify the cargo receipt, container loadout areas and construct a new
blast freezer.

“This resulted in a similar volume of containers being packed and loaded out from
the one consolidated site versus the same being handled over the two facilities
utilised last season, with a reduction in operating costs per tonne handled.

An impressive 50% increase in volumes were handled through the new blast freezer
and provided options to a number of clients in the region,” said Mr Gear.

Increased dairy produce was also handled by the Open Country Dairy (OCD)
warehousing operation. OCD intends to construct a third drier that will be operational
for the 2020 / 2021 dairy season. Mr Gear said, “South Port will be working closely
with OCD to ensure the necessary resources at the Port will be available to meet
their requirements for this expansion.

New Zealand Aluminium Smelter (NZAS) continues as an important customer for
South Port representing one third of the Port’s annual total cargo.

NZAS is currently facing some headwinds paying for higher electricity, raw materials
and transmission costs ($334 million for transmission costs alone over the last five
years), at a time when aluminium prices are at their lowest since early 2017.

Recently the Electricity Authority released its latest proposal for reforming the way
transmission costs are allocated. This reform, if adopted, would see transmission
costs reduced by $11 million per year for the smelter but would not take effect until
2024.

South Port continues to work closely with NZAS on opportunities to pack a variety of
aluminium products into containers for export on MSC vessels and potentially
opening up new markets for this customer.

The Intermodal Freight Centre (IFC) adjacent to the KiwiRail container transfer site
at Invercargill processed increased volumes in its third year of operation.

“We’ve started to see a balancing of trade flows with exports of Medium Density
Fibreboard for Daiken Southland Ltd being packed and transported to South Port for
shipment complementing imported cargo being unpacked at this facility,” said
Mr Gear.

P a g e | 3

The Marine department piloted 352 ship movements through the Port in addition to
the 30 pilotage movements carried out in the Fiordland sounds. The recent growth
in tonnage handled at South Port has translated to increased ship movements and
busier wharves.

All sectors of the business were impacted with the exception of forestry where
reduced ship calls reflect larger volumes of logs being loaded per visit.

Mr Gear said, “Cruise activity in Fiordland has increased in recent years with more
than 100 vessels now calling each year. South Port has been working closely with
Southland’s new regional development agency, Great South, and Cruise
New Zealand to attract ship calls into Bluff.

Trade forecasts for the Port, with the exception of logs, remain steady, said
Mr Chapman. “The forecasted farm-gate milk price for the coming season looks
reasonably healthy which again bodes well for agricultural inputs that are shipped
into the region annually.”

OUTLOOK

Based on all known factors, South Port estimates that earnings in the next financial
year are likely to reduce by approximately 5%.

“Increased infrastructure expenditure will be a feature for coming years with the
focus in the next twelve months being placed on the access bridge, wharves and
electrical infrastructure.”

A review of the Port’s Asset Maintenance Plan will see R&M spend increase to
~$3.5 million in 2020 and near ~$4.0 million in 2021 compared with $2.1 million in
2018 and $2.8 million in 2019.

“This lower earnings profile and in the absence of any unforeseen circumstances,
the Directors will endeavour to maintain the current level of dividend payment,” said
Mr Chapman.



FOR FURTHER INFORMATION PLEASE CONTACT:

Mr Nigel Gear
Chief Executive
South Port New Zealand Ltd
Tel (03) 212 8159


Mr Warren Head
Managing Director
Head Consultants Ltd
Tel (03) 3650 344
Mobile 021 340 650
headconsultants@xtra.co.nz